With a fixed nominal wage the SAS curve is positively sloped because
A) an increase in P decreases the real wage and raises profits if output is increased.
B) A decrease in P decreases the real wage and raises profits if output is increased.
C) business firms are responsive to interest rates.
D) the marginal leakage rate is small.
Correct Answer:
Verified
Q49: Figure 7-3 Q50: What is held constant at all points Q51: We derive the aggregate labor demand curve Q52: With the nominal wage rate given,an increase Q53: Suppose that the discovery of cold fusion Q55: Along a short-run aggregate supply curve firms
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents